tv First Business FOX November 30, 2012 4:00am-4:30am PST
are comments from the capitol indicating a show down over the fiscal fiasco? in today's cover story: big bucks for starbuck's. why the company is trying out a $7 cup of joe. plus, trader views on which corporations will be next to pay out a special dividend. you want to hold on to your shorts - a stock that appears
to be headed for a super slide. and, keep it on this bat channel - a superhero's car is on the auction block. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's friday, november 30th. i'm angela miles. in today's first look: a buyer's bounce: despite rehtoric out of washington, investors are buying stocks. the dow is now up for the week. gains were also made across the board. the cbo reports the debt limit is okay for now. the treasury has the money to fund the government up to march of 2013. speculation is building t-mobile may start selling apple iphones next week. a campaign called "fast food forward" is happening in new york. employees are planning walkouts at burger king, kfc and taco bell. they want pay hikes up to $15 per hour and the right to form a union.
we are here to serve up some information about the market. tim mulholland of china-america capital joins us now. good morning to you tim. it is the final trading day of the month. what do you anticipate? > > i think more of the same we've been seeing. the market seems to think it has a lot of resilience. we bounced earlier this week off of the 200-day moving average. s&p down around 1382-3 level. we are now near the post-election highs, which, end-of-month buying, typically book-squaring and so forth, typically leads to higher prices, so i would probably expect that, albeit interrupted by headlines regarding the fiscal cliff. > what is your reaction to a lawmaker who wants to put an extra tax on high-speed trading? what do you think about that? > > i think it is short- sightedness. i don't mean that as any real criticism, but when you look at it, they really want to arrest the problem. it should really be on cancellations. the speed of trading isn't- in my opinion, isn't really the issue. speed
should be competitive and whatnot. as long as everyone has the same fair advantage to that, i think that's what the key is. putting a tax on a broad level, saying this will fix all, i think there would be so many unattended consequences as a result of that and what it opens the door for, i just think it is totally counterproductive and really not the solution. it's a hair trigger. > thanks for your thoughts today. good to have you on the show. have a good one. > > you too. president obama heads to philadelphia today to visit a toy manufacturing plant. it's where he will also talk about his plan to avert the so-called fiscal cliff. comments yesterday from house speaker john bohener hinted lawmakers are back to square one on settling the cliff chatter. "no subsantive progress has been made in the talks between the white house and and the house over the last two weeks."
the stock market briefly sold off on boehner's comments, but then bounced back. optimism had been growing after president obama and representative boehner made remarks wednesday that a deal could be worked out. now speaker boehner insists there are still many roadblocks in the way. last night, boehner offered no details but rejected the democrats' $4-trillion plan presented by treasury secretary timothy geithner. investors have a more optimistic view on the global economy. a new survey by bloomberg shows 2/3 of investors surveyed described the worldwide economy has either stable or improving. overall, they considered the global economy to be in the best shape in 18 months. when asked which countries will offer the best investing opportunities for next year, the u.s. ranked number 1 for the 8th quarter in a row. china came in second, and europe was considered the worst for returns. for those holding out hope for a second life for twinkies, ho- hos and ding-dongs, there's encouraging news. hostess says it is in talks with more than 100 interested buyers. at the same time, hostess is seeking
approval in banruptcy court to pay its top executives $1.8 billion in bonuses to retain them during the year-long wind- down process. union reps are asking the judge to bring in an independent group to oversee that process. citigroup is doing some trimming this holiday season. according to reports, the big bank plans to cut 150 jobs and shrink bonuses by up to 10%. the layoffs will affect people working on the trading and investment side of citigroup. sources say people who are top performers won't be affected. several wall street firms have fired employees in cost-cutting moves to deal with new rules meant to prevent another financial crisis. some coffee fans may call starbucks, "sevenbucks." that's how much it'll cost for a grande-sized - that's kind of in the middle - cup of its most expensive offering ever. our cover story rips the lid off this and finds a hot commodity in very limited supply. starbucks, the global coffee- house chain based in seattle, has found a rare coffee bean - costa rica finca palmilera. it
grows in the mountains above 5000 feet and produces a small crop of intensely-flavored beans. that's enough to perk up jack scoville, a commodities analyst. "i do know some producers there. i've got to get some of those beans." the coffee chain bought enough for three weeks of sales limited to the pacific northwest. a starbucks spokeswoman said "it's for the person who wants to take a coffee journey." "i think there's a lot of products like this - wines, craft beer, cupcakes. this fits in with that." but at $7 a cup, this coffee journey could lead you back to your atm. "a person on an average budget could barely afford it. i get a treat once a day "i was drinking coffee when i first started down here, but i think it's overpriced as it is."
as a commodity, coffee prices are down and production up in brazil. but americans' taste for flavorful and unique coffees has only grown. $4 lattes used to be the ceiling. now, who knows how high is too high? specialty coffee is not completely recession-proof, however. technomic research found starbucks' same-store sales in the u.s. dropped negative throughout 2008 and most of 2009. but it has bounced back and stayed positive since. a little strategy could go a long way with holiday shopping this year. jen waters of marketwatch.com joins us with holiday shopping ideas. good morning to you jen. > > good morning to you. > you believe people should start to listen to what the retailers are saying for indications about great deals. why is that? > > because the retailers will kind of let you know. they're not going to come right out and say, "oh my gosh, we can't sell any sweaters." but they will let you know, like, oh sales are a little sluggish, we're not
seeing as much traffic as we expected, things of that sort. which means they are going to be really aggressive in trying to push some of that merchandise off the shelves. > a number of retailers are mentioning that hurricane sandy damaged their sales. could that benefit some consumers? > > it is going to depend on where you live. if you live on the east side or the northeast side, where you were hit by hurricane sandy, you are probably going to see some good sales on luxury items, because right now people are spending their money on home improvement, and they are spending their money on recouping the everyday stuff they lost in the hurricane. meanwhile, on the west coast, those luxury items are already being sold at a pretty steady pace right now, so you are not likely to see a lot of sales on that. but certainly there will be sales, and dependent on how the season progresses, you can expect sales like that. but you are better off on the east coast getting sales on luxury goods than you will be on the west coast. > thank you very much for that update. jen waters. > > thank you. two million toys seized so far
this year, and that's before christmas. that number comes from the u.s. consumer product safety commission, along with u.s. customs and border protection. it's a joint effort to keep dangerous toys away from kids. 38 toys have been recalled this year due to lead violations, chocking hazards or sharp points. the sec is looking into a possible insider trading scandal. two brokers are charged with trading inside information ahead of ibm buying spss in 2009. the sec claims both men allegedly where tipped off about the buyout through a research analyst and traded shares of ssps. the construction industry is facing a major shortage. 2 million construction workers were laid off during the recession, and fewer new workers are going into the field. as the housing market continues to recover, demand for construction of homes and buildings has risen 31% nationally this year. texas, arizona, iowa and florida are facing the largest worker shortages, which are expected to spread throughout the country.
chevy's volt is topping the charts for the second year in a row. 92% of volt owners tell consumer reports magazine that they would definitely buy a volt again. that puts the plug- in hybrid car at the top of the influential publication's owner-satisfaction survey. according to consumer reports' auto editor, the two-year reign points to the continuing trend of enthusiasm for fuel- efficient cars. a new season of auto shows is upon us. in cities across north america from now until mid- april, hot wheels from automakers around the globe will tempt you with their latest models. today, the l.a. auto show opens at the los angeles convention center. it's often called the "green auto show" for its emphasis on energy-efficient vehicles. automakers took the wraps off an all-electric fiat 500 chevy spark. meanwhile, jaguar and landrover unveiled lighter models and audi introduced four new diesel models for the u-s market. the l.a. auto show runs through december 9th.
non-superheroes are going to get a chance to bid on batman's original batmobile this january. the one-of-a-kind, souped-up ford futura concept car was entirely-hand built for the 1960s tv series in turin, italy, of all places. the auction is set for january 19 in scottsdale, arizona. the final price is expected to reach into the multi-millions. still to come, traders debate which stocks could be next to offer special dividends. but first, are small businesses getting worried by fiscal fears coming from washington? that's next with bill moller.
e have been signs that key elements of the economy are picking up. small businesses, they're the backbone of the employment picture. what about small businesses owners? what are they seeing? there may be no better measure of that than the surepayroll small business scorecard. the data just came out for november. michael alter is ceo of the company. give us the soundbite version of what we are going to talk about. > > the headline to me is we're in the winter, we should start to see it get colder across the country, which may or may not have happened, but it is clearly frozen for small
businesses. > yikes. all right. not a good soundbite. let's start with hiring, what is that doing? > > hiring is falling month- over-month by 0.1%. so, it's not much of a change, but it's certainly a change in the wrong direction. > now pay has been flatlining. is that continuing? > > pay continues to be flatlining, and that is why i say i think small businesses are really frozen. you see little change in the hiring and you see pay flat. > also this other statistic is the hiring of 1099 workers, contractors. that has been going up. is that continuing? > > the trend for contractors is continuing to go up, which, as that increases, it's really a relief valve for small businesses as opposed to doing full-time hiring. > it's also a measure of their uncertainty. you hire contractors because they are so easy to get rid of if things get even worse, or hire more if it gets better. now, optimism. this is also one of the key ones that you look at. > > optimism is around 60% right now, which is a little bit lower than it was last month - it was 67%. still, for small businesses, these are glass- half-full people, so 60% is not great optimism. the reason for that is really clear: a lot of it has to do with the fiscal cliff.
> the fiscal cliff. you asked some questions about that. what were the findings there? > > we really asked about how much is the fiscal cliff impacting you in terms of whether you are going to hire or not. what we found is that 60% of folks said they are going to hold off on bonuses for wait and see what happens with the fiscal cliff before they make some decisions around that. we saw almost 40% of small businesses saying, "if we even thought about hiring, we are going to wait until we get some kind of resolution around the fiscal cliff. and most concerning to me, 60%+ of small businesses don't believe the government can figure out how to solve this fiscal cliff. > c'mon congress and president. all right, michael alter. i'm going to see you in a month. let's see if some things are improving. i appreciate it. > > i can only hope. thanks for having me. just ahead, are banking stocks ready to short circuit? a couple of traders charge in with their views after the break.
the time has come for traders unplugged. joining us this week, a pair of options pros - alan knuckman and andrew keene. good morning guys. > > good morning angie. > round number one: dividend distributions. will a new, higher capital gains rate ruin the dividend stock payoff? and what will it mean for tech stocks or bonds? > > tech stocks i think are interesting and bonds as well. we have seen 103 companies report special dividends in quarter four. 66 of these companies have reported since president obama came in control. i think we have seen a
lot of them. costco came out with a $67 special dividend, las vegas sands, dillard's, ethan allen. the big one i am going to keep an eye on for technology especially is apple. $130 billion cash. are they going to issue a special dividend? > > some people want the money now because they think the capital gains rate is going to go from 15 to 20%. so, we will have to see. but it is interesting that some of these people that are spitting out this money, wynn had a $750 special bonus, and sheldon adelson of lvf took in an extra $1.2 billion because he wants the money now instead of paying more taxes on it. buat will be interesting is, how the bond market reacts, because in corporate bonds now with this adjusted yield, it almost equals out with the dividend payments that people have been going after in some of the conservative stock plays. > round 2: banking on optimism? the financial etf xlf has traded between $14 and $16 for months now. will the bankers bounce or bust? > > go ahead. > > i like it where it's trading here. look for a breakout above $16. my target on it is $18. it has been in this range since february, so it looks like it
wants to do something as the volatility continues to decline- > > the vix keeps going down, does that mean the market is going higher? > > the june $14 call is trading for roughly break-even - it's about $200, and it's really only got 20¢ of time value with that much time. > > xlf, i have not exactly favored this trade, but i haven't been playing it to the bull side. year-to-date it's up 20%. the spy is only up about 6.5%. so it has been performing well. however, i think the banking industry has problems. trading desks are not making money. it is hard for them to lend out money. they have regulation problems as well. i do like the xlf as composed of any single component because it gets you a nice basket of morgan stanley, wells fargo, and jp morgan. > > it's diversified, but we were at $38 just a couple of years ago. with these lows at $6- > > and we're at 6. > > the halfways point is in the $20s, so we still have a lot of upside left. > round 3: color me green - what is the better economic indicator - black friday or cyber monday? > > i think that one is very easy, and i actually think it is cyber monday. if we look at
the way amazon has traded, it is up 9 of the last 10 days. amazon has been on fire since their earnings. it continues to go higher. the 140 3/4 p/e doesn't faze amazon. we just saw kohl's stores and nordstrom report poor same-store sales. both the stocks sold off. we also saw tiffany sell off on earnings. so i think cyber monday is the biggest e-commerce day ever. > > people are spending money. consumer confidence is at five- year highs. housing stats are coming back. a lot of economic indicators are getting very, very positive right now, so i think you have to remain bullish on the economy. don't worry about inflation. i got a 50-in. tv for $399. > nice. > > prices are not going up. > nice. let's talk about your bonus round question now. andrew, you love apple. everybody who watches the show knows that. so i have a question for you: how many varieties of apples are out there? 1000, 3000, or 7000? > > macintosh, fuji... > > i will take the middle one. they always if you don't know the answer, b or c, so i will take 3000. > > hybrids or straight? > the answer is actually 7000. 7000 varieties of apples. > > i haven't seen 6900 of them though. > i like them apples. good to have you on the show. have a good weekend. > > thank you. don't go anywere. up next, the big reveal on a stock the options market is predicting could soon have a "very bad day." chart talk is next.
there is a stock that is capturing a lot of attention from traders right now, including scott bauer of trading advantage. scott, tell us all about it. > > this herbalife, hlf, is trading down about 5% over the last few days, but more importantly, what we are seeing is implied volatility, implied option volatility, has doubled over the last couple days. the put-buying in this stock seems to be endless. the put-to-call ratio is about 20:1 right now. with the stock trading in the low $40s, we are seeing massive put buyers on december, so near-term options - the $40 line, $37.50 line, all the way down to the $32.50 line. there is just an unending demand for these puts right now, almost as if there is something in the marketplace, some kind of news announcement, that we don't know about yet, but that is coming out any time soon. > just to clarify, that means that the put buyers believe this stock could drop below $37.
> > absolutely. and if you look over the last year or so, $37.50 is actually a fairly important point, a good support point. but over the last two years, $32 is really where the bottom is. so, who knows what is going to happen here. but the option market is really indicating some substantial move coming up pretty shortly. > is there any chance this is a whole lot of nothing? > > it could be. but you typically don't see the sustained amount of buying over two, three, four days, like we are seeing now, when it is really nothing. so, who knows? it could be, but the option market, like i said, with the implied volatility, trading where it is at, is really implying some substantial move coming up here. > very interesting. good to have you on the show, and have a wonderful weekend. > > you too angie. that closes out our show for
today. coming up next week: wheeling and dealing. why u.s. car makers are keeping some new models under wraps during the l.a. auto show. as always, thank you for watching. have a wonderful weekend. our much advertised system is here but there are signs we may see a little decrease in the rain. but there is a lot of rain right now.
we're following breaking news out of pleasanton. all lanes of westbound 580 are shut down. we'll tell you about the accident that led to the shut down and tell you when it's likely to reopen. here in the north bay we are gearing up for a wet, windy, hazardous commute this morning. it's all ahead. good morning, everybody it is a very wet, rainy friday november 30th i'm brian flores. there yes, it is. good morning, i'm partly cloudy partly cloudy. thank you for waking up with us. intense was my drive overnight. >> for some. there are some areas that are not that bad and then wham. it was as bad as i saw it in orrin da. look up toward the north bay where there has been three to six inches of rain. there is